[DO NOT PUBLISH] IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 1 1- 14 11 1 Non -Arg um en t Ca le nd ar

__ __ __ __ __ __ __ __ __ __ __ __ D. C. Dock etNo. 1 :1 0- cv -2 16 12 -CM A PALADIN SHIPPING CO. LTD., a Fo rei gn Co rp or at io n, ANATOLIY CHABAN, anin di vi du al , Pl ai nt iff s - Ap pe ll an ts , ve rs us STAR CAPITAL FUND, LLC, a Fl or id a Lim it edLiab il it y Co m pa ny, LEON GO LDSTEIN, anin di vi du al , Defen da nt s - Ap pe ll ees .

__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co urt fo r th e So uthe rnDis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ _ (Sep te m be r 26 , 20 12 ) Befo re CARNES, WILSON, andANDERSON, Circu itJu dg es .

Case: 11-14111 Date Filed: 09/26/2012 Page: 1 of 10PER CURI AM:

Pal ad in Sh ip pi ng Co m

pa ny Ltd. an d An at ol iy Chab an(to ge th er, “ Ch ab an ”) ap pe al th e d is tri ctco urt’s fi na l ju dg m en t co nc lu di ng th atCh ab anwas e nt it le d t o da m ag es on ly in the am ou ntof t he in te res t due on hi s l oa n t o S ta r Cap it al Fund , LLC, andLeon Gol ds te in (to ge th er, “ Gol ds te in ”). 1 In20 00 , Chaba n a ndGol ds te in ag reedto bu y th e Ch al si , a 19 68 -b ui ltcarg o ve ss el . They were ab le to sec ur e a Ca m bo di anfla g, an d t he ir v en tu re s eem s t o ha ve be enrel at iv el y

su cces sf ul , alt ho ug h t he ag e o f th e sh ip res ul te d i n n um ero us ex pe ns iv e rep ai rs . In 2 00 8, the sh ip ’s cla ss ifi cat io n was withd rawn , anditwas qu aran ti ne d i n p ort, u nabl e to sai l. Aro un d t ha t s am e ti m e, Ch ab anlo an edGol ds te in $1 ,15 0,0 00 fora se pa rat e bu si ne ss ve ntur e. So on th erea fte r, bo th si de s al le ge dl y su ffer edser io us fin an ci al ha rd sh ip s as a res ul t o f th e d own tu rninth e wor ld ’s eco no m y . On Ja nu ary 25 , 20 09 , th e p art ie s ag reedinwrit in g (t he “ Janu ary 25 Agre em en t” ) th atGol ds te in wou ldpa y

ba ckth e lo anby March 9, 2 00 9, wi th in te res t. Go ld st ei n’s 5 0% in te res t i n t he Ch al si was p res en te d a s co ll at eral . If Gol ds te in di d n otpay by

We previously

rema nded the c ase f

or the district cour

t to determine whe ther 1 diversity jurisdiction ex ists in t his case. T he district cour t concluded that jurisdiction does ex ist. We agree . 2

Case: 11-14111 Date Filed: 09/26/2012 Page: 2 of 10Mar ch9, 2 00 9, Ch ab anha d t he rig htto sel l Go ld st ei n’s i nt eres t i n t he sh ip . 2

Gol ds te indi d n otrep ay

th e lo an , andon Marc h 4 , 20 09 , he v ol un ta ril y tra ns ferr ed hi s 5 0% i nt eres t i n t he Ch al si to Ch ab an . The pa rti es ne ve r ag reedon th e v al ue of t he Ch al si , bu t the y bo th reco gn iz edth atth e tr an sf er o f th e sh ip di d n otsat is fy th e fu ll lo anam ou nt . In Apr il 20 09 , Gol ds te in m ad e a p aym en t o f $4 00 ,00 0. He s ta te d t ha t h e v al ue d h is sh are o f th e sh ip at $ 75 0,0 00 , andth us he ha d c om pl et el y rep ai d the lo anam ou nt of $1 ,15 0,0 00 . Chaba n d is pu te d t hi s, cl ai m in g t ha t Go ld st ei n’s s ha re o f th e sh ip was worth s om ewh ere aro un d $ 20 0,0 00 . Ch ab anbro ug htsu it , all eg in g t ha t Go ld st ei n a gr eedto pa y $1 ,15 0,0 00 bu t ha d p ai d o nl y

$4 00 ,00 0 t o- da te . Gol ds te in an swe redby clai m in g, i nt er al ia , th at he ha d a lre ady

pa idth e o ut st an di ng ba la nc e b y ten de rin g h is 50 % in te res t i n t he Ch al si . As the di st ric t co urt s ta te d, the pri m ary is su e to be de ci de d was : “ wha t was th e v al ue , inMarc h 2 00 9, o f a 5 0% s ha re o f . . . a sp eci al ly-m od ifi ed , Rom an ia nBoth men signed the January 25 Agree ment. The tra

nslation from Russian was: 2 I , L eon Goldstein, has bor rowe d USD 1,150,000 from A.F . Chaban a nd is to return the m with interest on Marc h 9, 2009. Fifty per c ent (50%) of my

share in the ship “Chalsi” make s a par t of this collatera l. I f the de bt is not repaid timely , Chaban shall have the right to sell my share in the ship havingpreliminarily agree d to the selling price of my share in writing. I f the de bt is repaid, the Contract shall bec ome null and void. 3 Case: 11-14111 Date Filed: 09/26/2012 Page: 3 of 10bu il t, Ca m

bo di an -fl ag ge d, 1 96 8 Vo lg o- Dondry-carg o fr ei gh te r th atus ua ll y carr ie d s crap m et al an d c oa l o n t he Bla ckSea, b utwhi chat t ha t t im e was un de rg oi ng ex te ns iv e rep ai rs ? ” The di stric t co urt h el d abe nc h t ria l, wh ere n ei th er p arty pre se nt edso li d ev id en ce as to th e v al ue of t he sh ip . Chaba n c la im edat v arying ti m es th at Gol ds te in ’s sh are was wort h $ 20 0,0 00 , $2 50 ,00 0, $ 30 0,0 00 , or $ 0. Ma de li ne Koo y , a ve ss el bro ke r who ha d n ev er s een th e Ch al si , tes ti fie d a s a l ay witne ss 3 an d s ta te d t ha t s he ha d p rev io us ly esti m at edth atth e v al ue of Go ld st ei n’s s ha re was be twee n $ 17 5,0 00 an d $ 20 0,0 00 . The di stric t co urt i ss ue d a n o rd er l is ti ng it s fa ctua l an d l eg al co nc lu si on s. The co urt g av e n o wei gh t t o Ko oy’ s v al ua ti on of t he sh ip , du e to th e li m it edsco pe of he r te st im on y

an d l im it edkn owl ed ge of t he sh ip it se lf. An d g iv enCh ab an ’s va ry in g p ers on al va lu at io ns of t he sh ip , th e co urt s ta te d t ha t Ch ab anha d co m pl et el y fai le d t o p res en t an y

cred ib le ev id en ce as to th e v al ue of the Ch al si . Bec au se th ere h adbe enno ev id en ce o n t hi s i ss ue , th e co urt co nc lu de d t ha t Ch ab an ha d fa il edto pro ve th atth e v al ue of t he sh ip was n otequa l t o $ 75 0,0 00 , andth us Ch ab anha d fa il edto pro ve an y da m ag es res ul ti ng fro m

Gol ds te in ’s bre ach of t he

The district cour

t ruled that Kooy

could proc eed only

as a la y witness and thus the 3 extent of her testimony

was limited. This decision was not appe aled. 4 Case: 11-14111 Date Filed: 09/26/2012 Page: 4 of 10Ja nu ary 25 Agre em en t, ex cep t fo r th e in te res t o n t he lo an—wh ic h Go ld st ei n

co nc ed edha d n otbe enpa id . Ch ab anm ov edforreco ns id erat io n, s ta ti ng th atth e co urt h adim pr op erl y sh ift edth e b ur de n. Ch ab ancla im edth atitwas Go ld st ei n’s b ur de n t o p ro ve th e va lu e o f th e sh ip be cau se th atis su e wen t d ire ct ly to Go ld st ei n’s d efen se s o f pa ym en t an d a cco rd -an d- sa ti sf act io n. Si nc e th e co urt fo un d t ha t the re was no ev id en ce as to th e v al ue of t he Ch al si , Chaba n c la im edth atGol ds te in ha d fa il edto pr ov e ei th er d efen se , andth us Ch ab anwas e nt it le d t o t he ful l u np ai d a m ou ntof $7 50 ,00 0, p lu s i nt eres t. The co urt d en ie d t hi s m ot io n, s ta ti ng th atitha d c on st ru ed th e p art ie s’ lo ando cu m en ts as c on tra ct s, an d c on tra ctlaw re qu ire d t he pl ai nt iff —Ch ab an—t o p ro ve hi s d am ag es , whi chhe ha d fa il edto do . Ch ab anm ai nt ai ns on ap pe al th atth e d is tri ctco urt m is un de rs to odth e bu rd en s i n t hi s ca se . Whe n re vi ewin g t he res ul ts of abe nc h t ria l, we co ns id er the di stric t co urt’s factua l co nc lu si on s u nd er a cl earl y erro ne ou s s ta nd ardan d i ts leg al co nc lu si on s d e no vo . Ren te ria–M ari n v . Ag– Mart Pr oduc e, In c., 53 7 F .3d13 21 , 13 24 (11 th Cir . 20 08 ). The co nt ractat i ss ue he re i s a p ro m is so ry no te : an “un co nd it io na l wri tt en pr om is e, si gn edby the m ak er, t o p ay ab so lu te ly andinan y

ev en t a c ert ai n s um

of 5 Case: 11-14111 Date Filed: 09/26/2012 Page: 5 of 10m on ey

eit he r to , or t o the ord er o f, th e b eare r ora de si gn at edpe rs on .” Bla ck ’s Law Dict io na ry

11 62 (9t h e d. 2 00 9) . Altho ug h t he sh ip was p le dg edas c ol la te ral , Gol ds te in su rren de redit vo lu nt ari ly as pa ym en t, an d a cco rd in gl y th e d is tri ctco urt an al y zedth e Ja nu ary 25 Agr eem en t u nd er s ta nd ardco nt ractlaw ra th er tha n a s a UC C Art ic le 9 d efi ci en cy act io n. Defe ns es li ke pa ym en t an d a cco rd -an d- sa ti sf act io n c anbe all eg edinan y br each of c on tra ctdi sp ut e; th ey are n otli mit edto sec ur edtra ns act io ns . See Mo or e v. J arv is Ent ers ., Inc ., 52 3 S o. 2 d 1 23 3, 1 23 4 (F la . Dis t. Ct . App . 19 88 ) (“ Acco rd an d s at is fact io n was pro pe rly fou ndto be anav oi da nc e to ap pe ll an ts ’ br each of co nt ractco un t . . . .”). Thu s, re ga rd le ss of t he termin ol og y us edto de sc rib e th e Ja nu ary 25 Agre em en t, the po in t i s t ha t Ch ab anpro vi de d e vi de nc e sh owi ng th at Gol ds te inowed$7 50 ,00 0, an d Go ld st ei n c la im edth athe ha d a lre ady pa idth e am ou ntdu e b y

ten de rin g h is in te res t i n t he Ch al si . Inot he r wor ds , as h e sp eci fic al ly stat edinhi s an swe r to Ch ab an ’s co m pl ai nt , Gol ds te in was a ll eg in g t he de fen se of p aym en t. “ Paym en t i s an affi rm at iv e d efen se , th e b ur de n o f pr oo f of whi chres ts up on th e d efen da nt .” Tou chbe rry

v. Nem ec, 2 64 So . 2d46 6, 4 67 (Fl a. Dis t Ct . App . 19 72 ) (em ph as is ad de d) . Flo rid a h as st at edth at“ th e b ur de n o f pr ov in g e ach ele m en t o f an affi rm at iv e d efen se res ts on th e p arty th atass ert s t he de fen se .” Cu st er Me d. Ct r. v. 6 Case: 11-14111 Date Filed: 09/26/2012 Page: 6 of 10Uni te d Au to . Ins . Co., 6 2 S o. 3 d 1 08 6, 1 09 7 (F la . 20 10 ); s ee Cl ic k v . Dowd , 13 5

So . 84 0, 8 40 (Fl a. 19 31 ) (“ The rul e is ele m en ta ry th atwhenth e d efen dantinan act io n o n apro m is so ry

no te ten de rs a pl ea o f pa ym en t the bu rd enis on hi m to pr ov e h is pl ea b y

a pr ep on de ran ce o f th e ev id en ce.”) ; s ee al so Fed . R. Civ . P. 8( c)(1 ) (n ot in g t ha t p aym en t i s an affi rm at iv e d efen se ); F la . R. Civ . P. 1.1 10 (d ) (s am e). The di stric t co urt co nc lu de d t ha t the va lu e o f th e sh ip wentbo th to Gol ds te in ’s affi rm at iv e d efen se of p aym en t an d t o C haba n’s cl ai m forda m ag es , an d t hu s t he bu rd enfel l o n C haba n t o p ro ve a va lu e fo r th e sh ip be cau se th is va lu e wou ldde te rm in e th e d am ag es th atCh ab anwas e nt it le d t o re cei ve fro m Gol ds te in fo r th e b reac h- of

-co nt ractcla im . Becau se th ere was no so li d e vi de nc e as to th e va lu e o f th e sh ip , th e d is tri ctco urt co nc lu de d t ha t Ch ab anwas e nt it le d t o n o da m ag es , exc ep t fo r in te res t o n t he lo an , whi chbo th pa rti es ag reedwas o wed . W e d is ag ree wi th th e d is tri ctco urt’s co nc lu si on fortwo reas on s. Fi rs t, whe ne ve r a d efen da ntass ert s p aym en t as anaffi rm at iv e d efen se , th e am ou ntth at th e p la in ti ff i s u lt im at el y

en ti tl edto reco ve r wil l al way s d ep en d o n wh ethe r (an d t o wha t ex te nt ) th e d efen da ntcanest ab li sh th e d efen se of p aym en t. Eve n t ho ug h Ch ab an ’s reco ve rab le am ou ntde pe nd edonth e v al ue of t he Ch al si , th is do es no t m ean th atCh ab anha d t he bu rd enof p ro vi ng sai d v al ue . The v al ue was re le va nt 7 Case: 11-14111 Date Filed: 09/26/2012 Page: 7 of 10be cau se itde te rm in edth e am ou ntof Go ld st ei n’s p aym en t; inot he r wor ds it

de te rm in edth e ex te ntto whi chGol ds te in ’s def en se of p aym en t wo ul d s uc ceed . The burd enof p ro vi ng th is de fen se rem ai ns on th e d efen da nt . The p la in ti ff d oe s no t h av e to pro ve lac k o f paym en t. J aco bs v. Be ck s, 3 55 So . 2d12 41 , 12 43 (Fl a. Dis t. Ct . App . 19 78 ) (“ The re i s n o re qu ire m en t tha t the Pla in ti ff p res en t ev id en ce as pa rt o f he r cas e in ch ie f th atth e n ot es rem ai n u np ai d . . . .”). 4 Seco nd , Flo rid a co urts ha ve m ad e itcle ar tha t a p la in ti ff s at is fie s h is pri m a faci e cas e m erel y

by pres en ti ng th e v al idpro m is e to pa y . “ The pro mis so ry no te is it se lf e vi de nc e o f th e ex is te nc e o f th e d eb t an d i ts in tro du ct io n i nt o e vi de nc e is su ffi ci en t t o e st ab li sha pr im a fac ie cas e. Whe n i t i s re gu la rly adm it te d i nt o ev id en ce n o a dd it io na l ev id en ce o f th e p res en t ex is te nc e o f th e d eb t i s n eces sa ry up on th e cas e o f th e p la in ti ff.” Kn au er v . Levy, 11 5 S o. 2 d 7 76 , 77 7 (F la . Dis t. Ct . App . 19 59 ); s ee al so Cru m v. U.S. Fi de li ty & Guar. Co ., 46 8 S o. 2 d 1 00 4, 1 00 6 (Fl a. Dis t. Ct . App . 19 85 ); To uc hb erry, 264 So . 2dat 4 67 . Accor di ng ly, un de r Fl or id a la w, Chaba n m ethi s p rima facie bu rd ensi m pl y by pres en ti ng th e v al id pr om is so ry

no te for $1 ,15 0,0 00 an d c la im in g t ha t $ 75 0,0 00 rem ai ne d unp ai d. It was th enGol ds te in ’s burd ento pro ve th e d efen se th athe ha d a ctua ll y pa idth e A purpose of

this rule is presumably

that someone who bor

rows money

cannot 4 purport to pay

with an item of inca lculable va lue, then esc ape f rom any further pay ment beca

use the lender is unable to prove that the value of the item was insuffic ient to satisfy the entire loan. 8 Case: 11-14111 Date Filed: 09/26/2012 Page: 8 of 10$7 50 ,00 0 wh enhe ten de redhi s i nt eres t i n the Ch al si (i.e ., by pro vi di ng ev id en ce to sh ow tha t h is in te res t i n t he sh ip was wo rth $7 50 ,00 0) . Thi s i ss ue was a n a ffi rm at iv e d efen se un de r bo th Flo rid a an d F ed eral law, an d i t was tre at edas a n a ffi rm at iv e d efen se by the pa rti es inth ei r pl ead in gs . No am ou ntof r ech arac te riz at io n o f th e tr an sa ct io n b etweenth e p art ie s wo ul d c ha ng e th e co nc lu si on th atth e b ur de n o f sh owi ng pa ym en t al way s re st edwith t he de fen da ntGol ds te in . In o th er wo rd s, “ itwou ldap pe ar tha t the tri al co urt m is co nc ei ve d t he ap pl ic ab le law an d e rro ne ou sl y pl acedup on pl ai nt iff

-ap pe ll an t th e b ur de n o f pr ov in g n on -p aym en t o f th e n ot e, rathe r th anco rrec tl y pl aci ng up on de fen da nt -ap pe ll ee the bu rd enof p ro vi ng pa ym en t.” To uc hb erry, 264 So . 2dat 46 7. W e can no t re ly on a ny purp orte d p res um pt io n tha t the fai r m ark etva lu e o f th e sh ip was e qu al to th e am ou ntof d eb t tha t i t s ecu red . Firs t, tha t ru le was ap pl ie d i n t he co nt ex t o f a “ co m m erci al ly unr eas on ab le ” d is po sa l o f co ll at eral by th e le nd er—whi chdo es no t ap pl y inth e cas e sub ju di ce. See W ei ne r v. Am . Petro fin a Mktg ., Inc ., 48 2 S o. 2 d 1 36 2, 1 36 4- 65 (Fl a. 19 86 ). Seco nd , th e p art ie s’ own be ha vi orsh ows th atth ey ne ve r in te nd edforth e sh ip to serve as c ol la te ral for th e en ti re $ 1,1 50 ,00 0 l oa n—whi chwas t he ou ts ta nd in g l oa n v al ue when th e sh ip was off eredas c ol la te ral . 9 Case: 11-14111 Date Filed: 09/26/2012 Page: 9 of 10Add it io na ll y , th ere i s n o way to c ha ract eri ze Go ld st ei n’s p aym en ts as an

acco rd -an d- sa ti sf

act io n. Ch ab animm ed ia te ly chal le ng edGol ds te in ’s cla im th at hi s $ 40 0,0 00 pa ym en t, i n c on jun ct io n wi th th e p rev io us su rren de r of hi s i nt eres t i n th e Ch al si , m ean t tha t the en ti re $ 1,1 50 ,00 0 h adbe ensat is fie d. Giv enth e d is tri ctco urt’s m is un de rs ta nd in g o f th e b ur de ns inth is cas e, an d gi ve n t ha t Ch ab anhi m se lf s eem s t o h av e ad m it te d a t tria l tha t Go ld st ei n was en ti tl edto so m e am ou ntof c red itforsu rren de rin g h is in te res t i n t he Ch al si , we 5 be li ev e th e b es t co ur se is to rem an d fo r th e d is tri ctco urt t o h av e anop po rtu ni ty to reco ns id er i ts factua l co nc lu si on s o n t hi s i ss ue un de r th e p ro pe r le ga l s ta nd ard s an d t he n re cal cu la te dam ag es . VACATED AND REMANDED.

See June 30 trial tr. at 25. 5 10 Case: 11-14111 Date Filed: 09/26/2012 Page: 10 of 10